Meta, the parent company of Facebook and Instagram, has recently declared that the corporation will opt for a complete overhaul of its advertising policy. Through a token transaction, Meta will charge a 30% fee for the advertisers' ads appearing on Instagram and Facebook iOS apps on a top-level brought by it, as of March.

In response to a 2022 App Store update by Apple, the tech giant has stretched its usual cut of digital purchases to 30% to include posts and boosted posts, wherein they are already viewed in the same manner as ads.

Apple's Influence on Meta's Policy Adjustment

The modification is a direct consequence of Apple's decision to broaden its revenue-sharing model, now covering boosted posts in social media apps. Apple's policy targets Meta and other social platforms that enable users to enhance the reach of their content through in-app payments.

In a statement shared with The Verge, Meta acknowledges that small businesses and influencers willing to purchase boosts on iOS will now face a 30% service charge by Apple on the total ad payment, excluding taxes.

While Meta emphasizes that users can still purchase boosts through Facebook's and Instagram's websites on desktop or mobile to circumvent the Apple-imposed fee, the company states, "We are required to either comply with Apple's guidelines or remove boosted posts from our apps. We do not want to remove the ability to boost posts, as this would hurt small businesses by making the feature less discoverable and potentially deprive them of a valuable way to promote their business."

Adjustments in Boosted Post Purchasing Process

In addition to the imposed 30% fee, Meta is introducing changes to the boosted post-purchasing process. Advertisers seeking to increase posts through iOS apps must now add prepaid funds and pay for them before the boosted posts are published. Meta plans to charge an extra 30% to cover Apple's transaction fee for preloading funds in iOS.

This new payment process is set to roll out initially in the US and will later extend to additional markets and countries throughout the year.

Also Read: Apple Aims High, Eyeing Qualcomm's 5G IPhone Modem Replacement

Apple's Response and Continued Adherence to Guidelines

In response to Meta's announcement, Apple maintains that its in-app purchase system has consistently been required for digital goods and services within apps. Boosting, defined as the payment to increase the reach of a post or profile, falls under the category of a digital service, thereby necessitating compliance with Apple's in-app purchase guidelines. Apple notes that the Meta Ads Manager app on iOS, designed for managing ad campaigns, allows businesses to set up and pay for their ad campaigns without utilizing the App Store's in-app purchase system.

This development highlights the ongoing tension between major tech companies as they navigate evolving policies and their implications for advertisers and small businesses. The modification in Meta's fee structure directly responds to Apple's extended revenue-sharing model, showcasing the intricate dynamics of app store policies and their financial impact on businesses.

As the digital landscape evolves, users can anticipate further negotiations and adjustments in app store policies and fees.

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